That is a strange error, I had no problem making them about 12 hours ago on smp5. Maybe there are a specific set of circumstances which are preventing it for some reason. I would try a forced update and install your mods one at a time, checking if it works each time. Does it work on single player/other servers?

According the Known Bugs page of the Minecraft Wiki, it's an issue other people are having, though it seems to be hit and miss. There's really no concrete evidence of what causes it, though I will say that just a moment ago I dug up some snowballs on SMP6 and was unable to craft them into snow blocks.

UPDATE:One thing mentioned about the snow block bug was that it seemed that new snowballs dug up wouldn't craft, while snowballs from before the 1.2.4 update would. I had some snowballs left over from before the update on SMP5 and they craft fine. Using /iteminfo, I found that the old snowballs have an item id of 332, while new snowballs dug up right now have an id of 332:1. The recipe probably calls specifically for 332 by itself, and thus won't craft with the new ones.

UPDATE THE 2ND:I did a little more looking, and found something odd:Although newly dug snowballs have an item id of 332:1, if you have a non-full stack of old snowballs in your inventory, they will stack with them and the whole stack will still have an item id of 332. Usually things with alternate data bits don't stack, or "morph" for that matter, so... that's interesting!

According the Known Bugs page of the Minecraft Wiki, it's an issue other people are having, though it seems to be hit and miss. There's really no concrete evidence of what causes it, though I will say that just a moment ago I dug up some snowballs on SMP6 and was unable to craft them into snow blocks.

UPDATE:One thing mentioned about the snow block bug was that it seemed that new snowballs dug up wouldn't craft, while snowballs from before the 1.2.4 update would. I had some snowballs left over from before the update on SMP5 and they craft fine. Using /iteminfo, I found that the old snowballs have an item id of 332, while new snowballs dug up right now have an id of 332:1. The recipe probably calls specifically for 332 by itself, and thus won't craft with the new ones.

UPDATE THE 2ND:I did a little more looking, and found something odd:Although newly dug snowballs have an item id of 332:1, if you have a non-full stack of old snowballs in your inventory, they will stack with them and the whole stack will still have an item id of 332. Usually things with alternate data bits don't stack, or "morph" for that matter, so... that's interesting!

Maybe an easy workaround for now would be to always keep a few of the old snowballs on hand, and stack them with the new ones to change the item values, then repeat for all snow balls before making them into a block. Nice find, good work